Empowered Group of Ministers (EGoM) headed by Union Minister of Finance P Chidambram approved on 16 January 2014, the sale of 10 percent government stake in Indian Oil Corporation (IOC) to Oil and Natural Gas Corporation (ONGC) and Oil India Limited (OIL).
ONGC and OIL will buy a part of the government's stake in Indian Oil Corp for a total of 4700 crore rupees to 5000 crore rupees. It will help the government meet part of its disinvestment target of 40000 crore rupees set for the financial year 2013-14.
The government opted to sell the 10% stake in IOC through block deal on stock exchange. The Securities and Exchange Board of India (SEBI) rule for block deal says that the rate should be one per cent higher or lower than previous day's closing price.
At present, Union Government of India holds78.92 percent stake in IOC whereas ONGC already holds 8.77 per cent stake in IOC.
The 10% disinvestment in IOC was approved by the Cabinet last year. However, the decision was deferred due to opposition from the Union Ministry of Oil and Natural Gas and IOC Chairman RS Butola. They had cautioned the government against launching a public offer in light of the weak market and falling shares of IOC.